Health insurance giant Humana HUM posted solid quarterly results on Wednesday that beat analysts' forecasts as it continued to attract new full-benefit member users to its platform, and also focused on streamlining costs, though investors didn't exactly jump on the stock.
The Louisville, Kentucky.-based healthcare insurance provider posted adjusted earnings of $869 million, or $5.03 a share, in the quarter ended Sept. 30, vs. $922 million, or $4.58 a share, in the comparable year-earlier quarter. Analysts polled by FactSet had been expecting earnings of $4.58 a share. Revenue was $16.24 billion vs. $14.21 billion a year ago and ahead of the $16.15 billion forecast by analysts.
As Jim Cramer and the Real Money Pro team have noted, healthcare stocks in general, Humana in particular, are showing positive economics, including strong earnings, robust membership growth and a strong handle on costs. Cramer and the Action Alerts Plus team also like UnitedHealth (UNH - Get Report) for similar reasons.
By the same token, with Democratic contenders Elizabeth Warren and Bernie Sanders both making nationalizing healthcare among their primary platform promises, analysts and investors having been taking a more cautious approach to the sector - and will likely continue to do so as the 2020 presidential election race heats up.
For full-year 2019, Humana said it now expects adjusted per-share earnings of approximately $17.75, and membership growth of roughly 530,000 members, up from a previous range of 480,000 to 500,000 members, representing growth of about 17%.
Shares of Humana gained 2.12%, or $6.25, to $301 a share following the earnings release. They ended the trading day Tuesday down 0.77%, or $2.28 a share, at $294.75 on the New York Stock Exchange.
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